Members of the British Chamber of Commerce in Hong Kong are largely upbeat on the scope presented by “special access” to the Greater Bay Area, while at the same time they see it as a major strategic opportunity for the city to further develop its roles as an international financial hub.
“To capture the opportunities, many of the chamber’s members, large and small, are developing a China strategy built around the special access to GBA,” Peter Burnett, chairman of the British Chamber of Commerce in the city, said in an interview with the Post.
“I can take my company Standard Chartered as an example,” said Burnett, who is also an adviser at the UK banking group . “We are investing US$40 million (HK$310 million) in the Standard Chartered Greater Bay Area Centre in Guangzhou.”
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The importance of the Greater Bay Area for Standard Chartered is highlighted by the fact that the London-based lender, which generates much of its revenue in Asia, recently appointed a head for the area to lead its growth, identifying it as a geographic entity in its own right. The centre, which opened in the third quarter, will promote the development and application of innovative financial solutions and strengthen the bank’s cross-boundary banking services.
The Greater Bay Area initiative, a cluster of 11 cities in southern China which includes Hong Kong and Macau, has a population of over 70 million and a combined gross domestic product of about US$1.7 trillion. To harness the large economic potential of the region, regulators in Hong Kong and China have unveiled various cross-border pilot schemes, including Wealth Management Connect and Bond Connect, aimed at promoting closer financial cooperation in the bay area.
The chamber, which represents some 1,000 British, Hong Kong and international companies, sees the bay area initiative as a major strategic opportunity for Hong Kong to further develop its economic and business roles by leveraging its strengths including its separate legal system, financial expertise and international business connectivity.
Burnett cited Bond Connect – launched in 2017 allowing investors from mainland China and overseas to trade in each other’s bond markets – as an example.
“Bond Connect does exactly what Hong Kong is designed to do,” he said. “It provides a simple way for international investors to invest in the mainland bond market through Hong Kong, using systems and processes built in accordance with international best practice which are very familiar to the investors.”
Burnett added that “it is not very difficult to promote Hong Kong as an international business centre, and in particular the judicial processes. They have been tried and tested over many decades. You may not necessarily like the outcome, but at least you know you will get a fair hearing along the way without fear or favour.”
On the national security law (NSL) for Hong Kong introduced by Beijing, which opposition politicians and critics warn could be used to suppress dissent and erode freedom in the city, Burnett said that he does not see members pulling out of either Hong Kong or China.
This is in contrast to US companies with interests in the city. A survey carried out in August by the American Chamber of Commerce in Hong Kong found that about 39 per cent of the 154 firms had plans to move capital, assets or operations out of the city after more details were revealed about the NSL.
Burnett said businesses operating in Hong Kong are used to working with both mainland law and Hong Kong law – sometimes both at the same time when the contract is cross border. “This has been going on for decades. This is not a new challenge,” he added.
David Graham, executive director of the chamber, said the main concern of the business community was understanding where the lines are between compliance and non-compliance.
“We are seeking to engage with the Hong Kong government to understand where the lines are. This is made more difficult because this is a piece of mainland Chinese legislation,” said Graham.
The chamber has joined hands with its counterparts in Macau, Guangdong and the China-Britain Business Council to work together to develop policy recommendations to offer to governments and regulators, to access business opportunities arising from the bay area initiative.
As part of its initiative, the British chamber has urged the government to set up a “one-stop shop” where they can contact the government and government agencies, and really understand the opportunities, and what they need to know to work in the Greater Bay Area.
This came after a survey conducted by the chamber in September showed that government sources ranked fourth on where members got their information on the bay area, said Graham.
In June, the chamber submitted the first of two policy papers to the Hong Kong government focusing on recommendations for five key sectors: financial services, logistics, health care, education and energy and environment. It was “well received,” he added.
The chamber now aims to publish the second paper – which will cover digital technologies, real estate, construction, infrastructure, retail and hospitality – by the end of the year.
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